Newmont(NEM): Big Ghana royalty hike would be "severe"
Wed Nov 18, 2009 12:14pm EST
DAKAR, Nov 18 (Reuters) - U.S.-based international gold miner Newmont (NEM.N) said on Wednesday that a big hike in royalty rates in Ghana could "severely reduce returns on investment."
Ghana's finance minister in a speech to parliament on Wednesday said the West African nation would double minimum mineral royalties to 6 percent and engage the mining industry on dividend payments, tax exemptions and the fiscal regime.
"Of course, we are willing to discuss with the Government any changes it may propose to the royalty rate or other aspects of our operations in Ghana," a company spokesman said.
"However, a substantial increase in the royalty rate would severely reduce returns on investment if it does not also take into account rising production costs, especially energy and electric power." (Editing by Anthony Barker)
